The central bank of El Salvador disclosed two papers on Wednesday. There were listed all the regulations financial institutions will have to follow in order to deal with Bitcoin.
Banco Central de Reserva (BCR), the central bank of El Salvador, presented draft regulations that will instruct banks on how to offer their clients services related to Bitcoin. The documents were released for discussion on Tuesday.
The first paper is titled “Guidelines for the Authorization of Operation of the Digital Wallet Platform for Bitcoin and Dollars.” It contains information about the implementation of the new law that sees BTC as legal tender.
The second document, which is titled “Technical Standards to Facilitate the Application of the Bitcoin Law,” contains more details about the law that will be officially introduced on September 7.
To offer their clients digital wallets, financial institutions will have to register with the central bank first. Know-your-customer (KYC) verification and anti-money laundering (AML) procedures will be required for every user.
“Clients of the digital wallet may be individuals and legal entities resident or not in the country that comply with the requirements and standards of knowing your customer and prevention of money and asset laundering, financing of terrorism and proliferation of weapons of mass destruction.”
Article 29 of the document demands financial institutions to inform their clients about Bitcoin. The asset is highly volatile, transactions are permanent, and if a private key is lost, the virtual currency will be too.
Alejandro Zelaya, the Finance Minister of El Salvador said that the Central American country had sought technical assistance from the World Bank since it wants to use bitcoin as legal tender alongside the U.S. dollar.
Anyhow, the World Bank has denied the request of El Salvador for technical assistance on implementing Bitcoin as legal tender in the country, because of “environmental and transparency shortcomings”.